Garden State Stands Apart in Hospital Closures and Bankruptcies
PRINCETON, N.J., Nov. 11 /PRNewswire-USNewswire/ -- New data released by the American Hospital Association shows that U.S. hospitals enjoyed healthy profits in 2007 - the same year that New Jersey hospitals experienced an unprecedented rash of hospital bankruptcies and closures.
According to AHA Hospital Statistics - 2009 Edition, released last week, the nation's hospitals posted an average operating margin of 4.3 percent in 2007. Operating margins measure profits or losses based purely on operations, not investment income.
That margin reflected the largest single-year jump in at least 15 years, according to the healthcare trade journal Modern Healthcare.
The contrast for New Jersey's hospitals is dramatic. In New Jersey, the average operating margin was 1.3 percent, according to NJHA's analysis of audited financial data. Nearly 50 percent of the state's hospitals lost money in 2007. Five filed for bankruptcy protection. And three acute care hospitals ceased operations.
That troubling trend has continued in 2008, with an additional five acute care hospitals closing their doors.
"The contrast is striking between the financial health of the nation's hospitals overall and the grim picture here in New Jersey," said NJHA President and CEO Betsy Ryan. "Garden State hospitals are struggling to survive in a very unfriendly landscape compared with their counterparts across the country. It's a problem that needs to be carefully examined before our patients face an all-out access-to-care crisis."
Hospitals officials cautioned that 2008 promises to be an exceptionally difficult year for hospitals, both in New Jersey and nationwide. The nation's ongoing economic woes not only threaten hospitals' investment income and credit costs, but also increase the demands of the uninsured as more Americans face layoffs and the loss of their health insurance coverage.<
|SOURCE New Jersey Hospital Association|
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